Priming the Political Pump for Climate Legislation

Dan, Rick, and Jonathan have all discussed the implications of the political events of the last week for climate change policy. Certainly, it seems clear that both from a vote-counting perspective and from a political momentum perspective, the special election last week made passage of a climate change bill through the Senate generally harder. And observers more knowledgeable than me have concluded that the Citizens United case will result in more corporate influence in our political system, which does not bode well for the enactment of policies that could force important sectors of the economy (e.g., coal, oil, electricity production) to, at the very least, engage in costly alterations to their production methods (if not go out of business eventually at some point in the future).

While others have tried to game out various options for passage through the Senate in the near term (and I hope they’re right!), there is no reason that we should necessarily take the current political landscape as given for the future. Indeed, given the challenges we face right now, if we want significant and serious climate change policy at some point in time, I think we have no choice but to think about how to use law and policy to not just respond to, but also change the political landscape.

One option is to try and respond to the power of the various interests opposed to climate change policy (such as coal and oil) by trying to build up interests (wind, solar) that could be in favor of climate change regulation. After all, it’s not that corporations are necessarily opposed to environmental regulation per se – it’s just that they’re opposed to regulation that’s harmful to their bottom line.

How can we build up the interests that might favor climate change regulation in the future? Easy – provide subsidies, tax credits, and support for industries such as wind and solar energy (and, depending on your perspective of the underlying merits, nuclear or hydro power as well). The more employees those industries have, the more profits they have, and the larger they become, the more powerful they will become as political actors. And since these industries will necessarily benefit from stringent climate change regulation, maybe they can grow into the 250- or 500-pound gorilla in the room that can help offset the power of the traditional energy industries. These industries will have the resources and motivation to make campaign contributions, send lobbyists to happy hours on the Hill, monitor the implementation of regulations by FERC or EPA or the USDA, and ensure a strict climate change policy is developed and implemented. Because the more costly that carbon is, the more attractive their product will be.

Of course, developing these industries will take time, and time is rapidly running out. But we need to build up solar and wind industries now in any case, so investing in that component is not a distraction from the task that we have to undertake.

The other question is whether or not the coal and oil industries might oppose subsidies for solar and wind. That seems unlikely, since tax credits and subsidies are not really a zero-sum game. Money for solar tax credits does not necessarily mean any fewer tax credits for Exxon Mobil. (Of course, if a lobbyist for the coal or oil industry reads this post, perhaps the calculation is different!)

So perhaps the most fruitful path to take right now is to focus on the steps needed to develop and build the industries that, down the road, can be our best allies for strengthening climate change law and policy. Heaven knows we need all the allies we can get right now….

Reader Comments

Subsidies for fledgling renewable-energy industries could be financed with very modest carbon fees if fee revenue is used exclusively for that purpose. This contrasts with carbon-tax or cap-and-dividend proposals that seek to extract net revenue from regulated industries.

Furthermore, regulation of a particular industry could be much easier (less politically contentious, administratively simpler) if the regulations apply specifically and exclusively to that industry. For example, transportation interests would not necessarily oppose electricity regulation any more than the electricity sector would oppose vehicle emission regulations. This contrasts with monolithic, “economy-wide” regulations like cap-and-trade, which tend to invite consolidated political opposition.